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Aipedia: Charities and trustees
Trustees can read AI-summarised board papers, but they stay responsible for the decision and should check critical points independently before relying on them. A major decision taken on an unchecked summary is exactly what a breach-of-duty claim is built on.
Part of: AI in Charities and trustees
In short
Staff may use AI to summarise long reports, investment reviews and option appraisals for trustees. The Charity Commission's 2024 AI blog warns that relying on AI-generated advice for a critical decision without reasonable independent checks may breach trustee duties, and CC3 s.8 requires reasonable care and skill, taking advice when necessary. CC3 s.9.3 keeps trustees collectively responsible for delegated work. If a decision goes wrong, trustee indemnity or D&O may respond to a breach-of-duty claim, subject to the policy terms and the exclusions in Charities Act 2011 s.189(2).
Board packs are long, and most trustees are volunteers with limited time. Chief executives and governance staff may use a generative AI chatbot, or an AI assistant built into office software, to:
Some trustees also run papers through AI tools themselves. That is harder to see and control, and it may put confidential papers into tools the charity has not approved.
See CC3, The essential trustee for the full duties.
Illustrative scenario: a board approves closing a regional service. The paper it relied on was an AI summary of a longer consultant's review. The summary dropped a caveat that part of the service's funding was restricted and that the funder had to agree to any change. After closure the funder asks for its money back and beneficiaries complain. The question becomes whether the trustees read the underlying review or relied on a summary nobody checked.
Other failure points include a summary that misstates investment performance, an AI-drafted recommendation nobody stress-tested, and a risk register condensed so far that a red risk disappears. The Commission's blog also notes generative AI can produce biased output, which can tilt how options are presented.
A claim that trustees breached their duty of care is the core risk trustee indemnity insurance and charity D&O are designed for, subject to the policy terms. CC49 describes TII as covering personal liability for breach of trust, breach of duty or negligence. Charities Act 2011 s.189(2) sets three limits: no cover for fines or regulatory penalties; none for defence costs where a trustee is convicted of an offence involving fraud, dishonesty, or wilful or reckless misconduct; and none for liability to the charity where a trustee knew, or must reasonably be taken to have known, the conduct was not in its interests, or did not care. A board that pressed on with AI output it had reason to doubt could end up arguing about that third limit.
In an incorporated charity a third party will usually claim against the charity itself, so cover for the entity matters as well as cover for trustees. See a charity trustee D&O scenario and what to do when trustees face a claim.
Apex arranges trustee indemnity and D&O for charities. A broker can check how your wording defines a wrongful act and whether anything in it limits cover for decisions supported by AI tools; see also does trustee indemnity cover AI decisions and the AI in charities hub.
Yes. Nothing in the Charity Commission's position prevents it. Its 2024 blog says trustees remain responsible for decisions, so for critical decisions they should make reasonable independent checks rather than rely on the summary alone, and keep human oversight to catch material errors.
Not automatically. The Commission says relying on AI-generated advice for a critical decision without reasonable independent checks may breach trustee duties. The test is whether trustees acted with reasonable care and skill under CC3 s.8, which depends on the decision and the checks made.
It may, subject to the policy terms. TII and D&O are built for breach of duty claims. Charities Act 2011 s.189(2) excludes fines and penalties, convicted defence costs, and liability for conduct trustees knew was not in the charity's interests or did not care about.
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Start a PI quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.
